JBird

Yes, I agree flying isn't like investing. The analogy was meant to illustrate the benefit of using a checklist to meet a goal. I suppose it wasn't a good one. I didn't quote Munger.

Then try looking for evidence to suggest that you're wrong. Munger has a name for this. An iron prescription, I think. In my view, what you're saying is akin to the following: I don't see how someone else's checklist could be of any help in one's flying. There is no right way to fly a plane. The primary goal is to protect your safety and thus put yourself in the best possible position to get from Point A to B. How you go about that is an individual, not a group, decision. As a wise man once said, "now the world don't move to the beat of just one drum, what might be right for you, may not be right for some". Of course, plenty of pilots would be dead today had they not totally relied on someone else's checklist. I agree there is no "right way" to invest. That the goal is to limit downside and to maximize upside. And I agree decisions come down to the individual. But it does not follow from these premises that using someone else's checklist cannot be helpful. As an investor my returns would be half what they are had I not totally relied on someone else's checklist.

Thanks Jbird. What website did you find that on? My pleasure. http://www.tilsonfunds.com/BuffettNotreDame.pdf

In 1991, speaking with students from the University of Notre Dame, Buffett said, "In that book Father, Son & Co. [subtitle: My Life at IBM and Beyond] you may have read, that Tom Watson Junior recently wrote, he quoted his father as saying “I’m no genius. I’m smart in spots but I stay around those spots.” And that’s all there is to it in investments – and business. I always tell the students in business school they’d be better off when they got out of business school to have a punch card with 20 punches on it. And every time they made an investment decision they used up one of those punches, because they aren’t going to get 20 great ideas in their lifetime. They’re going to get five, or three, or sever, and you can get rich off five, or three, or seven. But what you can’t get rich doing is trying to get one every day. The very fact that you have, in effect, an unlimited punch card, because that’s the way the system works, you can change your mind every hour or every minute in this business, and it’s kind of cheap and easy to do because we have markets with a lot of liquidity – you can’t do that if you own farms or [real estate] – and that very availability, that huge liquidity which people prize so much is, for most people, a curse, because it tends to make them want to do more things than they can intelligently do."

He's said it many times. I don't have a source for the very first time he said it, but here's one instance: http://buffettspeaks.blogspot.com/2007/01/permanent-value-teachings-of-warren.html

When I asked his partner Ben Raybould where Allen learned accounting, he simply said that overall, Allen is 90% self-taught.

Munger: (Part 1 of 5)

Great posts, thanks.

Very cool. Thanks for posting.

Just to echo LC, is there anything Bitcoin can do as a currency that dollars cannot do?

OP should have posted this in "What do you want for Christmas" thread.

http://www.theguardian.com/technology/2013/dec/18/bitcoin-plummets-china-payment-processors-digital-cryptocurrency

Do you run this firm?

Great post. I think I remember discussing this with you before-- I agree with your conclusion for the same reasons.

"If you are managing only $1 million, then you should be able to beat the S&P 500 by 10 percentage points with no risk or leverage." - WEB. Dec. 8, 2013 at University of Maryland

That is a wise man.

Where are these gems from? http://www.businessweek.com/1999/99_27/b3636006.htm

I'm not hostile to the arts. To be fair, it admits it's a complementary therapy to medical treatment. "As a complementary therapy to medical treatment, art therapy has shown to reduce negative effects of cancer diagnosis and treatment."

Hahaha damn you

You never disappoint. I think you're right, but I'm not certain. Indulge me. Let's say there's a situation where nobody is changing jobs. Let's say that the most beneficial advancement we can make as a society is to cure cancer. Would you agree that committing money towards cancer research helps further the goal of curing cancer? Would you agree that committing money instead towards art projects will not help further the goal of curing cancer? If so, is it true then that society is better off when the money goes towards cancer research instead of art projects?

I agree that Buffett's work as a capital allocator hasn't much benefited the wider world. Straw-man arguments are funny, but don't help me change my mind. I'm not arguing that if a group of laborers is given a pay-cut they'll suddenly become cancer-researchers. I'm just saying that incentives determine behavior. Laborers go where the money goes. If a profession offers very high pay, over time more people will enter/ stay in the profession. If a profession offers terrible pay, over time fewer people will enter/ stay in the profession. Of course we do. And of course people choosing to teach guitar is not a problem.

Buffett could offer 1,000 cancer-researchers $10 million a year to skip stones across a lake. You don't think those researchers would pick up a stone? In 1980 there were 6 million farmers in the US. By 1990 there were 3 million. Is it more likely those 3 million ex-farmers spent the 90's watching soaps, or found another line of work? People do what they do until the economics either force them to move on or incentivize them enough to move on.

An employment offer at the right price is going to attract laborers. And a huge sum of capital can command a huge amount of labor. The labor can be used to skip stones across a lake, or perhaps engage in cancer research. The quality of work is irrelevant to my point. I'm only saying people will sign up at the right price.

Now if he said that, I think it's a silly comment. He knows that artists are artists, and scientists are scientists. For what it's worth, here's what LC was quoting: http://youtu.be/VdYxVx3PHxk?t=2m39s Artists are artists until it doesn't pay to be an artist. Generally speaking, laborers follow the money.

One of the great benefits for society comes when a donation is made to further a cause that benefits society-- one that's not already being sufficiently funded. For example, Polio vaccination. Before you wail about which causes are beneficial to society, let's be clear-- that is a hugely gray area. And it's not the point.